Is the Franchisee required to get Better Blend's consent before transferring the Franchise Agreement?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
anchisee's taxes and other liabilities are paid. BBF may assign this purchase option to another party.
ARTICLE 15. TRANSFERS
- 15.1 By BBF. BBF may transfer or assign this Agreement, or any of its rights or obligations under this Agreement, to any person or entity, and BBF may undergo a change in ownership and/or control, without the consent of Franchisee.
- 15.2 By Franchisee. Franchisee acknowledges that the rights and duties set forth in this Agreement are personal to Franchisee and that BBF entered into this Agreement in reliance on Franchisee's business skill, financial capacity, personal character, experience, and business ability. Accordingly, Franchisee shall not conduct or undergo a Transfer without providing BBF at least 60 days prior notice of the proposed Transfer, and without obtaining BBF's consent. In granting any such consent, BBF may impose conditions, including, without limitation, the following:
- (i) BBF receives a transfer fee equal to $17,500 plus any broker fees and other out-ofpocket costs incurred by BBF;
- (ii) the proposed Transferee and its owners have comp
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, franchisees must obtain Better Blend's consent before transferring the Franchise Agreement. Better Blend retains the right to transfer the agreement without the franchisee's consent.
The FDD specifies that the franchisee must provide Better Blend with at least 60 days' prior notice of the proposed transfer. Better Blend may impose conditions when granting consent. These conditions include receiving a transfer fee of $17,500, plus any broker fees and out-of-pocket costs incurred by Better Blend. The proposed transferee must also complete Better Blend's franchise application process, meet the then-applicable standards for new franchisees, and be approved by Better Blend.
Additionally, the proposed transferee cannot be a competitor of Better Blend. They must execute Better Blend's current form of franchise agreement, which may contain materially different provisions than the original agreement. However, the new agreement will be amended so that the transferee is not required to pay an initial franchise fee. All owners of the proposed transferee must also provide a guaranty, and undergo any training that Better Blend may require.
Finally, the franchisee must have paid all monetary obligations to Better Blend and its affiliates, as well as to any lessor, vendor, supplier, or lender to the business. The franchisee must not be in default or breach of the Franchise Agreement or any other obligation owed to Better Blend or its affiliates. These stipulations ensure that Better Blend maintains control over who operates its franchises and that all financial obligations are met before a transfer occurs.